Tuesday, December 11, 2012 11:46 am
US: Afghans resisting efforts to track cash exodus
By DEB RIECHMANNAssociated Press
The U.S. and other nations have long expressed concern about the amount of cash being flown out of the country - an estimated $4.5 billion last year, according to the U.S. Congressional Research Service. Afghanistan has a cash-based economy and moving large bundles of cash is common, yet it raises the risk of money laundering and cash smuggling to finance terrorist, narcotics and other illicit activities.
Hundreds of millions of dollars from the collapsed Kabul Bank were flown out of Afghanistan - some in airplane food trays - to more than two dozen other countries, a recent report on the collapse said. The demise of the bank, the nation's largest financial institution, became a symbol of endemic corruption that plagues Afghanistan.
"The persistent delays in instituting basic anti-money laundering procedures by the Afghan government at Kabul International Airport are deeply troubling," the report by the Special Inspector General for Afghanistan Reconstruction said. "Although proper controls to monitor cash flows are important for any country to institute, they are particularly critical for a country fraught with corruption, narcotics trafficking and insurgent activity."
To help Afghanistan track the cash moving through the airport, the U.S. purchased $117,275 worth of bulk currency counting equipment. Though the contract to install them was awarded in July 2010, they were not put in until April 2011, the report said.
SIGAR staff made follow-up visits to the airport in September and November but never saw the cash counters being used. Moreover, the report said VIPs - some carrying cash - continue to bypass controls.
The report said the cash counters were in a small, closet-like area not easily accessible to customs or banking officials in the international terminal.
While they were plugged in and appeared to be in working order, they were not connected to the Internet or a computer server. The report said that being connected is essential for sending the serial numbers of the bills and other data to the Financial Transactions and Records Analysis Center of Afghanistan, which is part of the Afghan central bank.
"U.S. Department of Homeland Security officials told us that their efforts to address these problems have stalled, even though the use of bulk currency counters to record and transmit data is critically important for their law enforcement activities," the report said. "According to one official, Afghan officials have neither committed to connecting the machines to the Internet nor agreed to establish a working link to FinTRACA."
During the visit, Afghan customs and banking officials were unable to explain why the machines remained without Internet connectivity, the report said.
"However, one DHS official told us that Afghan customs at Kabul airport were afraid that they would experience negative repercussions from the Afghan government if progress in instituting controls at the airport was made," the report said.
SIGAR expressed dismay that cash being carried by VIPs was being declared, but still not scanned.
"No bulk currency counter was available for the counting or data collection of currency declared by VIPs, who do not undergo main customs or security screenings. According to a DHS official, many of the individuals who traffic money leave from the VIP area," the report said. "A new Very Very Important Persons (VVIPs) lounge was built to provide easier boarding access for high-ranking officials, again allowing transit without main customs screenings or use of a bulk currency counter."